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An electronics company is engaged in the production of two components C and C, used in radio sets. Each unit of C costs the

 

An electronics company is engaged in the production of two components C and C, used in radio sets. Each unit of C costs the company 5 in wages and 5 in materials, while each unit of C costs the company * 25 in wages and 15 in materials. The company sells both products on one-period credit terms, but the company's labour and material expenses must be paid in cash. The selling price of C is * 30 per unit and of C it is 70. Because of the strong monopoly of the company for these components, it is assumed that the company can sell at the prevailing prices as many units as it produces. The company's production capacity is, however, limited by two considerations. First, at the beginning of period 1, the company has initial balance of 4,000 (cash plus bank credit plus collections from past credit sales). Secondly, the company has available, in each period, 2,000 hours of machine time and 1,400 hours of assembly time. The production of each C requires three hours of machine time and two hours of assembly time, whereas the production of each C requires two hours of machine time and three hours of assembly time. Formulate the above problem as a linear programming problem.

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